Tenants Can Bring Class Action for Overcharge and Improper Deregulation

Tenant sued landlord for rent overcharge, claiming that landlord unlawfully deregulated apartments while receiving "J-51" tax benefits. Tenant asked the court to grant certification for a class action. The court ruled for tenant. Landlord appealed and lost. Landlord claimed that tenant sought a penalty, which Civil Practice Laws and Rules (CPLR) Section 901(b), a law governing class actions, prohibits. The court found that tenant's claim for overcharges and attorney's fees didn't constitute a claim for a penalty. Issues of when landlord received J-51 benefits, whether landlord deregulated apartments while receiving those benefits, which tenants lived in those apartments during those time periods, and whether landlord wrongfully charged market rents while accepting the benefits, were common issues that permitted a class action, despite the need to conduct individualized determinations of damages.

Borden v. 400 East 55th Street Associates, LP: 2013 NY Slip Op 02815, 2013 WL 1760598 (App. Div. 1 Dept.; 4/25/13; Andrias, JP, Renwick, Freedman, Feinman, JJ)